Opportunities for growth: innovative ways for hotels to drive revenue


With international travel slow to return to Australian shores, the hotel industry is looking for ways to leverage the continued boom in domestic travel.

According to Tourism Research Australia’s latest figures, in the month of August 2022, domestic travel spend was up 30% to AU$8.1 billion when compared to August 2019.

Australian Revenue Management Association (ARMA) Chief Executive, Melissa Kalan, told HM that while there has been great progress, it will be some time before normal business resumes.

“Whilst there have been some pleasing results for the broader industry both domestically and across APAC, in particular regional areas, and sectors such as holiday parks and resorts, the predictability with high certainty we previously enjoyed, and with a high degree of confidence, is still not there for the mid to long term,” she said.

“Although we remain optimistic, we must remain attentive to global events and changes that may continue to impact consumer demand and purchase behaviour. This places an even greater emphasis on the importance of insights derived from data, employee skill development, and ensuring internal communication lines are actively engaged to share, analyse, assess, and pivot strategies quickly when and where it is needed.”

In a bid to yield better results in the current market, some hotels are opting to invest in revenue management systems and market monitoring. Choice Hotels Asia-Pac introduced a revenue management program over the past 12 months and reports that the results have been “gamechanging”.

“We’ve seen outstanding returns on investment for hotels across all five Choice Hotel brands,” Choice Hotels Asia-Pac Director of Performance and Revenue Management, Anthony Stanley, told HM.

“Owners and general managers are actively engaging with our revenue managers and see them as an integral part of their team.

“The results speak for themselves, with revenue managed hotels in Australia outperforming market RevPAR in Q3 this year by almost 45%. In New Zealand, where the market is still in recovery, we’ve seen a significant increase against market in Q3 RevPAR performance of 154%.”

Revenue Management has become an essential component of Choice Hotels’ offering, and hotels in the group are rapidly testing and transitioning to these services.

“If you’re not taking advantage of the revenue management services on offer in the market, then you’re leaving revenue on the table,” Stanley said.

Choice’s automated revenue management tool, choiceMAX, helps franchisees effectively manage hotel room rates, channels, and inventory. It also integrates with the choiceADVANTAGE property management system and is configured to forecast and make recommendations on rates up to 365 days in advance, optimising pricing multiple times a day.

“It gives entry-level insights into local market trends, giving owners the ability to set rates in a more meaningful way,” Stanley said.

In the first half of this year, Choice calculated that having dedicated revenue managers assessing and setting rates for properties increased average daily rate at participating hotels by $13.50 per room per night.

“The maths is simple and shows the significant impact revenue management has on profitability for hotels over the course of a year by virtue of maximising their yield,” Stanley added.

Growing revenue

When it comes to revenue management, Kalan says “risks exist in the inconsistencies, inefficiencies, and inaccuracies”.

She points to the trend towards the 0-7 day booking window and says a great opportunity can be had or missed here.

“This depends on the property’s confidence that the demand will come and the confidence to not panic and react,” she said.

“This confidence can only come from data-driven insights and staying alert and aware of any changes that may impact this booking window trend.”

Kalan also highlights the importance of tapping new revenue streams through upselling, something that she says has been a missed opportunity in hotels due to a lack of technology, training, and time.

“Addressing these areas to ensure a consistent degree of upselling is critical, as is the need to incorporate a retailer’s mindset and focus on attribute-based selling techniques as much as possible,” she said.

Using source market data to help shape content and campaigns is another recommendation to ensure a consistent digital experience for customers, and she advises a review of all policies and campaigns to analyse impact on financial performance.

“Complete a risk versus benefit assessment within the context of all other guests using your property and its facilities and other market segments now increasingly available to you and consider if they are worth keeping, adjusting, or removing. An example of this may be a pet policy,” she said.

“I would also encourage all operators to invest in upskilling their teams in sales and how to sell smarter, this should also include reservations staff,” she added.


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